The term logistics remains an enigma, many people associate the term logistics with shipping. By definition logistics is the movement of goods or services from point A to point B however, the definition fails to add on all the other activities needed to facilitate such movement including custom clearance, drayage and final delivery to point B

To make matters more confusing, we have terms such as supply chain and procurement that are used in its place of logistics.  Too set the record straight, logistics, shipping, transportation, etc. are part of the supply chain umbrella and then came the term “third party logistics” which people somehow associate with warehousing.

The first 3PL companies started it out as freight forwarders who opened warehousing and delivery and then expanded to other services.

Any warehousing company or trucking company can call itself a 3PL that is why you need to check the services that company offers.

A true 3PL company offers a multitude of services such as:

1. Ocean and air freight services
2. Inland transportation
3. Order fulfillment or pick and pack
4. Warehousing services
5. Cross dock services
6. Customs clearance
7. Packaging services
8. Inventory control

Lately, many associate the term 3PL with order fulfillment.

Now, keep in mind that not all 3PL companies are created equal. In reality, only a few of the 3PL companies that show up on search engine searches are a true 3PL company; most of them just offer warehousing services.

A 3PL company should be able to take over your day to day fulfillment needs.

After a careful research you will find out, hopefully not the hard way, that only a few can deliver a solution.

A true 3PL company should be able to pick up the goods from your vendor and deliver them to the end user transparently with a continues flow of goods and information.

In a time where online shopping is blooming, thanks to Amazon, many small to medium size companies are outsourcing their fulfillment services to 3PL companies taking advantage of their expertise and off course cutting the operational cost.

Third party logistics Provides ( TPL Providers ) are companies that work with the owner of goods to outsource numerous components of it’s logistics to 3PL Providers that can perform the management function of the clients’ customs, inbound freight, distribution, warehousing, order fulfillment and outbound freight to the client’s customers .

Why Do Companies Use TPL Providers ?

Most companies selling or producing goods use a TPL Company for at least some domestic functions and nearly all global operations. That’s because third party logistic providers generate a range of benefits for companies who engage them.

Companies say they use 3PLs in order to:

Reduce current cost: Cost management is still the number one priority for shippers

3PLs often have scale advantage across their total operations.

Reduce future cost by leveraging the 3PL’s expertise and technology.

Improve customer satisfaction, with accurate order fulfilment and on-time delivery. The best 3PLs have real-time tracking and event management systems to provide real-time alerts when delays occur and are able to respond to change more rapidly and efficiently.

Provide global expertise. This includes documentation, customs, freight forwarding services, duty optimization, global airfreight, etc.

Reduce risk. This includes a range of risks like people risk.

Enable start-up. Logistics and the associated systems, along with labor acquisition, can involve significant capital requirements for a start-up operation. Even in an existing company, sufficient internal management resources may not be available to deploy this task. The 3PL can provide this support for a start-up operation.

Companies expect their 3PL to take direction, respond rapidly, and generate ideas for improvement. They further expect the 3PL to become a strategic partner in efficiently growing the business.

What Customer Service Capabilities Should a 3PL Company Have?

An efficient 3PL Company may get the job done, but if you focus on a provider that is known for why they operate, rather than how your overall experience will be much more pleasant.

A great 3PL has customer service capabilities that can reduce your workload in any way possible by offering a customer service team that is experienced in tracking, expediting, data procurement, reporting invoicing and auditing.

TPL Companies , Third Party Logistics Companies , or 3PL companies face continuous and evolving challenges in order to keep up with demand.

These days, many companies have outsourced their warehousing and distribution services to a 3PL Company.

To differentiate themselves, 3PLs are working to provide value, innovative solutions and information to facilitate data-driven decisions. 3PLs are also using technology and data to aid shippers in selecting the right shipment modes to maximize efficiency and reduce costs.

Major challenges facing TPL companies

• Finding New Talent
  The 3PL industry faces a challenge in the form of finding talent and this requires attention.. Most of the companies complain that it is very difficult to find the right candidates for the right vacancies.
• Rules and Regulations
  3PL companies need to stay informed of the new sets and regulations imposed by the different countries.. It is a challenging task,  for 3PL companies who try to cover as many markets as possible.
• Lack of Collaboration
  The lack of collaboration between the shippers, the carriers, and the end-customers can have an adverse effect on the smooth functioning of the supply chain. That is why keeping the lines of comuincation open is key to a successful relationship.

Other Challenges

• Meeting Requirements
  This is a major challenge that is faced by 3PL companies wherein in certain cases they are not able to meet the specific logistical needs of the shippers. The shippers are usually disappointed with some of the factors provided to them such as packaging, on-time delivery, customer service, etc.
• Lack of end user understanding.
  This is one key factor where 3PLs struggle with. Just imagine a customer who does not provide full scope of the work required and insists on changing the game plan on regular basis. Add to that the customer’s lack of knowledge of rules and regulations that 3PL companies have to abide by. In conclusion, the customer play a major role in the success of the cooperation with a 3PL company.

Due to the nature of the logistics industry, 3PL companies find themselves constantly battling customers, vendors and regulations to try to stay afloat. That is why, in the past,  most of the TPL companies tried to stick to one line of business such as freight forwarding or just transportation.

Furthermore , due to the nature of the relationship between end user and a 3PL company, common understanding on both sides is a must. if either side is not able to cooperate, the result is failure of the process

TPL is an acronym for third party logistics. “Third–party logistics (abbreviated 3PL, or sometimes TPL) in logistics and supply chain management is a company’s use of third–party businesses to outsource elements of the company’s distribution and fulfillment services.”

When looking to outsource all or part of a company’s logistics function it is important to look for a third party logistics provider with proven expertise. To put it simply, third party logistics or “3PL” is the integration of a company’s shipping, warehousing, distribution, transportation, and related logistics services through an outsourced or “third party” partnership. We provide our clients with powerful logistics solutions involving people, technology and location working together to provide integrated, full service supply chain management.

With comprehensive 3PL services; supply chain efficiency, customer satisfaction and brand value growth come together to benefit you. We bridge the gap between your goods and your customers.

We Specialize in designing efficient and cost effective logistics solutions customized to client’s specific needs. This allows you to focus on core competencies and receive a logistical advantage over the competition through the use of TPL’s professional third party logistics services.

Advantages of TPL Companies include:

• Allows flexibility to expand and contract inventory levels
• Enhanced technology and supply chain visibility
• Improved customer service offerings
• Allows companies to focus on core competencies
• A more strategic and scientific approach to logistics challenges
• Lower or eliminate capital expenditures associated with equipment and facilities.

TPL Companies offer a variety of value-added services to enhance customer’s warehousing and transportation programs including: kitting and final assembly, labeling, shrink wrapping, and pick/pack services.
Site Selection
We leverage expansive networks and industry knowledge to aid Customers in selecting a strategically placed warehouse site that is optimal for your specific distribution program.

Rate Assessment
By conducting a formal examination on client shipment history and rates in historical lanes of service our transportation analysts can cut cost out of your transportation program.

Inventory Management
Our best in class approach to inventory management insures a quantifiable inventory accuracy of 99.9%.

Vendor Management
For customers that wish to keep their own carriers in conjunction with, or in place of, We offer assistance in managing load planning activities and carrier performance.

Freight Management
We work with hand-selected carriers who have formed strong partnerships with International 3PL offering the best service when it comes to Ocean, air or inland transportation.

Some of the services offered by TPL Companies:

Ocean Freight Services

Air Freight Services

Shipping consolidation

Warehousing

Inland Transportation

Reverse logistics refers to all activity associated with a product or service after the point of sale, the ultimate goal to optimize or make more efficient aftermarket activity, thus saving money and environmental resources.

Types of activity common with reverse logistics includes: logistics, warehousing, repair, refurbishment, recycling, e-waste, after market call center support, reverse fulfillment and field service.

One aspect of reverse logistics is returns. Given the growth of online shopping, direct-to-store shipments, direct-to-home shipments, and the complexity of global sourcing, delivery mistakes are increasing exponentially.

Thus, reverse logistics is becoming more important. Mastering the returns or reverse logistics process will have a direct impact on your costs of doing business, on your company’s ROI, and on the level of customer service required to compete in today’s economy.

Like other supply chain management processes, reverse logistics can be made more efficient and profitable with better planning, management and execution. Reverse logistics can have a significant impact on a company’s bottom line, in good and bad ways.

Managing product that does not sell, is entering the end of its life, or has been returned due to buyer’s remorse is now generally understood to be a critical part of product life cycle management.

Yet this has not always been the case. Historically, most of the attention paid to product management has focused on the introductory phase or on the volume-shipping portion of the product life cycle. ” supply chain 247″

Everything you need in reverse logistics from one company

We handle everything. From door to door.

Our staff is trained in logistics and reverse logistics. In essence we become your customer service department.

Services Offered:

Customer Support : we take the calls for you. you can focus on your core business.

Pick up of defective or items to be returned: We handle all the paperwork until the shipment is returned.

Warehousing: We receive your products into our warehouse and advise you of condition of the returns.

Disposal: We dispose of returned products if needed according to regulations.

Inbound vendor management: Our team works as an extension of your own. We leave nothing to chance.

Our services are designed around your existing systems and working environment.

Contact us with any questions you may have. Our consulting services are free.

What is the true Definition of A Third Party Logistics Provider?

According to Wikipedia:  A third party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or “Third Party”) logistics services for part, or all of their supply chain management functions. Third party logistics providers typically specialize in integrated operation, warehousing and transportation services that can be scaled and customized to customers’ needs based on market conditions, such as the demands and delivery service requirements for their products and materials.
Often, these services go beyond logistics and include value-added services related to the production or procurement of goods, i.e., services that integrate parts of the supply chain. When this integration occurs, the provider is then called a third-party supply chain management provider (3PSCM) or supply chain management service provider (SCMSP).
3PL targets a particular function in supply management, such as warehousing, transportation, or raw material provision.

A standard definition of just what a third party logistics provider is can vary from contract to contract. Is everyone who thinks they are engaged in a “third-party contract” really involved in a “third-party contract?”
If a distributor, for example, has a truck pull up to their door a few times a day or week to deliver goods to their customers, is this truck their 3PL provider? The answer is NO.

The definition of a third party logistics provider is as confusing as the term supply chain. Even logistics professional struggle with the term. Many companies refer to trucking, ocean freight services or warehousing as 3PL Services.
Warehousing, transportation and storage by itself is not considered 3PL Services and the company that warehouses and transports the goods is not necessarily a 3pl provider. It is just a warehouse or a transport company.

Many companies require a transport company to deliver the gods from point A to Point B since it does not make sense in some cases to own your own trucks. These transport companies might not be 3PL providers. If that transport company is involved in the warehousing and distribution of the product then it can be called  third party logistics provider.

Many freight forwarding companies and shipping companies have added services to become 3PL Companies. For example, large freight forwarders will ship your container, handle the necessary customs paper work, deliver the container to their warehouse and distribute the product to end users.

Keep in mind that 3PL companies outsource some of the services to other 3PL companies, for example a customs broker who wants a piece of the action outsources warehousing and distribution to other companies while they appear as the provider of these services.

Is it a wise decision to outsource all these functions to one 3PL Company?

The answer is : it all depends on the end result. in some cases, the 3PL provider is unable to give provide the best transportation rates including ocean or inland therefore, a company my opt to use another 3PL provider. This has given rise to 4PL Companies that will manage the other 3PL companies making sure that the customer gets the best service and the best rates possible.

What is a 7PL Company ?

7PL is still considered a concept. Some 4PL companies offer back office support such as accounting, customer service, billing and receivables management. This concept is called by some 7PL Services. This concept is becoming a reality very quickly.

In a nut shell, the number of companies calling themselves 3PL providers has risen but the reality is that most of them do not offer the true services a 3PL is supposed to provide. As mentioned earlier providing these services without integration.

Whether it is a third party logistics provider, a fourth party logistics provider or a 7PL Provider, the bottom line is which one will be able to offer end to end solutions.

What is Logistics?

Logistics definition has been discussed by many. The bottom line is that it is understood differently by different people.

Logistics is the complete process involving planning, managing and controlling the flow of goods and services from point of origin to the point of destination.

The process consists of the process of integration of several aspects such as material handling, warehousing, information, transportation, packaging and inventory. The primary duty of an effective logistics system is to deliver the finished Products of the organization being at the required place at the lowest possible cost.

The logistics department is entrusted with the responsibilities of ensuring that the entire process is maintained and developed in accordance with the goals of the business at an economical cost. The tasks of the logistics department involve storage, distribution, warehousing, movement of goods from one place to another, tracking and delivery of goods. It includes a complete process of planning, managing, controlling and coordination to make sure that the goods reach the right place, at the right time, for the right cost and in a right condition. The various tasks performed by the department may be summarized as follows:

1. Ensuring all the requirements of the customers are effectively met.
2. To coordinate with third party logistics, Inland Trucking companies, Ocean shipping companies, freight forwarders, etc.
3. To ensure that there is a safe and timely shipping of goods.
4. To draft plans, policies and procedures for successful implementation of logistics system.
5. To ensure that the business goals of the organization are in synchronization with logistics system.
6. To create and maintain customer support.
7. To maintain coordination with vendors, service providers and transport carriers.
8. To ensure timely supply and payment of goods and reduce inventories.

Other Logistics Tasks

These are not the only tasks performed by the logistics department, the department also performs numerous other tasks, such as

Customer service management process: The department ensures that the goods are reached on time, in a safe condition and at the right place. It also serves as a middleman between organization, vendors and carriers for tracking down the geographical location of the goods and thereby provide customer support.

Procurement process Strategic plans are developed by the department to support development of fresh product and manufacturing flow management. This helps in bringing raw materials or semi-finished goods to the premises of the organization in a safe and proper condition at an economical cost. This also involves interactions with 3PLs. The department is also responsible for coordination with suppliers with regard to scheduling, hedging and timely delivery.

Physical distribution This process is concerned with the movement of finished goods to reach the point of destination. The department is responsible for the selection of the best mode of transportation while delivering the goods to the place of destination.

In conclusion: The logistics department is the heart and soul of every organization.

Some Companies outsource their logistics department to outside companies called third party logistics providers.

The logistics definition has to be understood by any entity that wishes to implement a logistics process

Logistics Definition Sources:

Budget Source
Purchase Order Management

What do logistics companies offer

Some might wonder what are logistics companies. Until this day the definition is not very well understood. In the beginning the term was used to describe the process of moving  goods from point A to Point B which in most cases involved shipping of goods from point of origin to destination by means of Ocean, air or inland or a combination.

The process involved picking up the cargo transporting to the port, shipping to destination, clearing customs and delivering to final destination.
Those were the old days. The process has evolved to include other activities such as compliance, distribution of the product and even handling some of the services such as customer services.
Many retailers and distributors started using these available sources to augment their own shipping department services in order to focus on their core activities, this gave rise to 3PL Companies.

Logistics is not what it was before, it is not only shipping, it is an integral part of the supply chain. Logistics providers add more and more services to their arsenal of services in order to be able to compete in a tough business. You can call it value added services.
Some Logistics companies have embraced technology where they are able to offer their customers the means to be able to track their shipments, monitor their inventory levels at the warehouse, and give total visibility as the movement of items minute by minute. In essence logistics companies have become  to many importers, distributors and retailers.

Over the years we have seen many large freight forwarding companies evolve into Third party logistics companies which compete for business aggressively. They are able to handle the needs of very large retailers and distributors however; they are still struggling in gaining the trust on smaller businesses. The cost of outsourcing logistics to such large companies is too high for smaller distributors and that gave rise to smaller 3pl’s who can offer better rates and a more personalized service.

The decision to go with one logistics company or another depends on need, services and rate.

Sources

http://www.pomnagement.net

http://www.budgetsource.com

http://www.ezshipping.net

Third party logistics providers (3PL) are a becoming an important part of today’s supply chain. These companies offer services that can allow businesses to outsource part or all of their supply chain management activities. Many 3PL companies offer a wide range of services including; inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight.
many freight forwarding companies have evolved into third party logistics companies in order to be able to attract more businesses by introducing value added services which they outsource themselves to other providers.

The growth of 3PL companies has been driven by the need for businesses to become leaner, more efficient reducing assets and allowing focus on core business processes.

Selecting A Third Party Logistics Provider

Deciding to a use a third party logistics company is a decision that depends on a many of factors that differ from business to business and from location to location. The decision to outsource certain business functions will depend on the company’s plans; future objectives, product lines, expansion, acquisitions, etc.

Once a decision has been made to outsource certain processes then a company will begin a search for the right 3PL that fits all their requirements at the best possible price. There are three types of Third Party Logistics Providers or companies that operate today.

• Asset Based
• Management Based
• Integrated Providers

Asset based third party logistics companies use their own trucks, warehouses and personnel to operate their business. Management based companies provide the technological and managerial functions to operate the logistics functions of their clients, but do so using the assets of other companies and do not necessarily own any assets. The third category, Integrated Providers, can either be asset based or management based companies that supplement their services with whatever services are needed by their clients.

When selecting a 3PL, the request for information (RFI) or quotation (RFQ) should be as detailed as possible. The company that is selected should be able to fulfill all the logistics requirements and that can only be assured if every requirement is communicated to potential companies. The RFI should include a detailed description of the areas to be outsourced. This will usually include:

• The scope of the contract, including locations, facilities, departments.
• Information on volumes involved; number of deliveries, warehouse sizes, number of items, etc.
• The logistics tasks are to be performed, e.g. warehousing, transportation, etc.
• The level of performance required.

After the bids have been received by a company from the prospective third party logistics providers, an evaluation would take place where a multi-discipline team will review each bid based on a pre-defined set of criteria. These will include some of the following.

• Does the 3PL provide the services required?
• Does the 3PL have the technology required to perform the tasks required?
• Does the company have the required warehouse space, dock capacity, warehouse personnel, etc.?
• Is the 3PL financially sound?
• Are the 3PL’s geographical locations suitable to cover the network?
• Does the 3PL have the flexibility to respond to changes?
• Are the 3PL’s environmental policies compatible?
• Are the costs of the services detailed enough for comparison to other bids?
• Are the customer references acceptable?
• Is the 3PL a good cultural fit?

3PL is a term used for many different types of logistic providers. Each type has its own strengths and weaknesses so be sure to choose the one that fits best with your goals.

3PL Companies, in order to succeed, have to work with their clients as partners. One vision, one goal.

Here are some of the reason why you should consider a third party.

Lower Rates

When you choose to work with a 3PL you can take advantage of lower rates. Typically, logistics providers have special rates they can provide you with to help save you money in the long run.

Lower Risk

When you work with a 3PL you can start to build an efficient, multi-location distribution network with a lower risk. Without a third party logistics partner, you would have to invest significant capital to build up a distribution network.

Extra Resources

When you work with a third party logistics provider you gain all of their resources as your own. Each provider has their own resources, so make sure to pick one that fits with your needs. Below are a few resources a 3PL can provide.

• Equipment
• Personnel
• Technology/Software

International 3pl continues to be a leader in Innovation.